If you find yourself in the middle of a group of economists (or those who consider themselves financially savvy) and interested in starting a lively discussion simply ask the group about the timing of recession … because opinions seem to be all over the place.
What brought this to mind was reading I did over the weekend as some widely-followed market gurus claim we are presently in a recession, others look at the first half of 2023, a few claim 2024 … and a couple actually say one won’t arrive anytime soon. In fact, Yahoo Morning Brief just now put out an article with the headline: “All That Recession Talk Could be Overblown!”
Frankly, I don’t know what to think (on a day when stocks again appear directionless).
A note I shared last week told of how many of the nation’s CEOs are expecting an economic downturn. With that firmly in mind I came across some charts presented by Professor Justin Wolfers of the University of Michigan which show that the pace of hiring is actually above pre-Covid levels. Yes, I’ve read of layoffs at firms such as Twitter, Meta, Wells Fargo and Google … but it seems quite a few job-leavers are shifting to other companies … and not (yet) joining the ranks of the unemployed.
So we are left to ask … what if we start to see inflation numbers drop and the attitudes shift to one in which fewer believe a recession to be imminent? Will investors once again jump into markets as they fear missing out on a rebound?
There is one other interesting note I saw as I reviewed some of the recent postings of Dr. Wolfers, as there was one that included data from the Labor Department showing a sharp spike in “persons with a job but not at work due to childcare problems.” An interesting thought he presented was different than recent claims that childcare cost is the reason many stay home but, instead, he asks the question if it could be due to the jump in the RSV virus.
That about wraps it up for today.
Just one more day before Election Day which I very much look forward to … but not because of any hope for a result one way or the other.
I’m just glad the phone calls at home will stop … and television commercials will become normal again.
Yes, we will see “vote for me” commercials cease and erectile disfunction commercials take over the airwaves.
I can’t help but get the feeling that the messages told in each are highly correlated.
Have a great day,
Joseph G. Witthohn, CFA
Emerald Asset Management PA, LLC
610 Freedom Business Center Drive
King of Prussia, PA 19406
cell: (856) 625-7915